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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1995 OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM
________________ TO ________________
Commission file number: 1-5260
Z E R O C o r p o r a t i o n
(Exact name of registrant as set forth in its charter)
Delaware 95-1718077
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
444 South Flower Street, Suite #2100, Los Angeles, CA 90071-2922
(Address of principal executive offices) (Zip Code)
(213)629-7000
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.
YES [X] NO [ ]
Common stock outstanding as of June 30, 1995 -- 15,987,955 shares.
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PART I - FINANCIAL INFORMATION
Corporation for which information is given:
This report is filed for ZERO Corporation and its subsidiaries (hereafter
"Registrant" or "Company") for the quarterly period ended June 30, 1995.
Item 1. Financial Statements.
a. The Statements of Consolidated Income required by Rule 10-01
of Regulation S-X are herewith filed as Exhibit Ia and are
incorporated herein by reference.
The Consolidated Balance Sheets required by Rule 10-01 of Regulation
S-X are herewith filed as Exhibit Ib and are incorporated herein by
reference.
The Statements of Consolidated Cash Flows required by Rule 10-01 of
Regulation S-X are as follows:
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<CAPTION>
For The Three Months Ended
June 30, June 30,
1995 1994
<S> <C> <C>
OPERATING ACTIVITIES:
NET CASH PROVIDED BY OPERATING ACTIVITIES $ 1,040,000 $ 4,679,000
INVESTING ACTIVITIES:
DECREASE (INCREASE)IN SHORT-TERM INVESTMENTS 13,742,000 (500,000)
PROPERTY, PLANT AND EQUIPMENT ADDITIONS (1,346,000) (851,000)
PURCHASE OF NON-CASH ASSETS OF
ACQUIRED BUSINESSES (4,080,000)
PROCEEDS FROM SALE OF ASSETS 1,670,000
OTHER 134,000 19,000
NET CASH PROVIDED BY (USED IN)
INVESTING ACTIVITIES 10,120,000 (1,332,000)
FINANCING ACTIVITIES:
DIVIDENDS PAID (1,756,000) (1,592,000)
OTHER (INCLUDING EFFECT OF EXCHANGE RATE CHANGES) 785,000 (64,000)
NET CASH USED IN FINANCING ACTIVITIES (971,000) (1,656,000)
NET INCREASE IN CASH AND CASH EQUIVALENTS 10,189,000 1,691,000
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 17,132,000 14,843,000
CASH AND CASH EQUIVALENTS AT END OF PERIOD* $27,321,000 $16,534,000
These Statements of Consolidated Cash Flows for the three months ended June
30, 1995 and 1994 are unaudited but, in the opinion of management, reflect
all adjustments (consisting of normal recurring adjustments) necessary to
present fairly the results for the periods.
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* Cash and Cash Equivalents include liquid investments purchased with
maturities of three months or less. At June 30, 1995 and 1994 short-
term investments with maturities longer than three months totaled
$6,160,000 and $19,025,000, respectively.
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Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.
The following should be read in conjunction with the financial statements
included or incorporated herein by reference.
Results of Operations
Net sales for the three months ended June 30, 1995 increased 11.2%
when compared to the prior year periods due primarily to increased
orders within the communication/instrumentation and data processing/peripherals
markets partially offset by weakness in the air cargo market.
Cost of sales, as a percent of net sales, decreased slightly when compared to
the same period in the prior year primarily as a result of higher sales,
product mix and cost containment efforts. Selling and administrative expenses,
as a percent of net sales, remained relatively consistent in fiscal 1996 when
compared to fiscal 1995.
Financial Condition and Liquidity
The financial condition of the Company remained strong at June 30, 1995.
Cash and short-term investments totaled $33,481,000 compared to $37,034,000
at March 31, 1995. The Company's working capital increased to $74,978,000
from $73,531,000 at March 31, 1995.
Cash provided by operating activities during the three months ended June 30,
1995 totaled $1,040,000, versus $4,679,000 during the fiscal 1995 period.
The decrease was primarily attributable to increased levels of accounts
receivable and inventory due to increased net sales.
In June 1995, the Company acquired the assets of Electro-Mechanical
Imagineering, Inc., a manufacturer of products to encase, protect and mount
closed-circuit television security devices.
Management believes that cash from operations, together with the Company's
short-term investments and ability to obtain financing, will provide
sufficient funds to finance current and forecasted operations, including
potential acquisitions. The Company will continue to invest its available
funds in liquid, low-risk investments.
Exhibit Ia - The Company's Statements of Consolidated Income for the
Three Months Ended June 30, 1995 and 1994.
Exhibit Ib - The Company's Consolidated Balance Sheets as of June 30, 1995
and March 31, 1995.
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PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders.
a. On July 26, 1995, the Company held its Annual Meeting of
Stockholders. Of the 15,977,005 shares eligible to vote at the meeting,
13,439,304 shares were represented in person or by proxy.
b. At the meeting, nominees Bruce J. DeBever, Bernard B. Heiler and
Whitney A. McFarlin were elected to serve as Directors for three year terms.
Gary M. Cusumano, Clinton G. Gerlach, John B. Gilbert, Wilford D. Godbold,
Jr., and Howard W. Hill will continue their terms of office as Directors.
c. Of the 13,439,304 shares represented at the meeting, nominees Bruce
J. DeBever, Bernard B. Heiler and Whitney A. McFarlin received 13,390,577,
13,390,582 and 13,393,633 shares voted in favor, respectively.
A shareholder proposal to approve the declassification of the Board of
Directors was not approved by receiving 6,832,560 shares voted against,
4,310,007 shares voted in favor and 156,143 votes abstaining. There were
2,140,594 broker nonvotes.
Item 6. Exhibits and Reports on Form 8-K.
a. Exhibits - 27. Financial Data Schedule
b. Reports on Form 8-K - None
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ZERO CORPORATION
Date: August 14, 1995 /s/ D. N. KAJIKAMI
D. N. Kajikami, Controller
and Chief Accounting Officer
Date: August 14, 1995 /s/ G. A. DANIELS
G. A. Daniels, Vice President
and Chief Financial Officer
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ZERO CORPORATION AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED INCOME
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Three Months Ended
June 30,
1995 1994
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NET SALES $ 48,617,000 $ 43,716,000
INTEREST INCOME 465,000 368,000
OTHER INCOME 176,000 288,000
TOTAL 49,258,000 44,372,000
COST AND EXPENSES:
COST OF SALES 30,839,000 28,093,000
SELLING AND ADMINISTRATIVE EXPENSES 10,860,000 9,567,000
DEPRECIATION 1,184,000 1,177,000
INTEREST EXPENSE 196,000 165,000
TOTAL 43,079,000 39,002,000
INCOME BEFORE TAXES 6,179,000 5,370,000
INCOME TAXES 2,472,000 2,092,000
NET INCOME $ 3,707,000 $ 3,278,000
PRIMARY EARNINGS PER SHARE $ 0.23 $ 0.21
DIVIDENDS DECLARED PER SHARE $ 0.11 $ 0.10
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING 16,094,000 15,971,000
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These Statements of Consolidated Income for the Three Months Ended
June 30, 1995 and 1994 are unaudited but, in the opinion of management,
reflect all adjustments (consisting of normal recurring adjustments) necessary
to present fairly the results for the periods.
Exhibit Ia
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ZERO CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
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<CAPTION>
June 30, March 31,
1995 1995
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ASSETS
CURRENT ASSETS
CASH AND SHORT-TERM INVESTMENTS $ 33,481,000 $ 37,034,000
ACCOUNTS RECEIVABLE (LESS ALLOWANCE FOR
DOUBTFUL ACCOUNTS OF $758,000 AND
$724,000, RESPECTIVELY) 28,588,000 26,310,000
INVENTORIES
RAW MATERIALS AND SUPPLIES 17,560,000 15,028,000
WORK IN PROCESS 7,109,000 7,046,000
FINISHED GOODS 4,305,000 4,147,000
OTHER 3,409,000 3,327,000
TOTAL CURRENT ASSETS 94,452,000 92,892,000
PROPERTY, PLANT AND EQUIPMENT 80,280,000 81,914,000
LESS ACCUMULATED DEPRECIATION (47,447,000) (47,925,000)
NET PROPERTY, PLANT AND EQUIPMENT 32,833,000 33,989,000
GOODWILL 30,363,000 29,624,000
OTHER ASSETS 17,985,000 15,019,000
TOTAL ASSETS $ 175,633,000 $ 171,524,000
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
ACCOUNTS PAYABLE $ 7,264,000 $ 8,326,000
ACCRUED WAGES AND COMMISSIONS 4,800,000 5,426,000
ACCRUED INCOME AND OTHER TAXES 3,523,000 1,671,000
OTHER 3,887,000 3,938,000
TOTAL CURRENT LIABILITIES 19,474,000 19,361,000
NOTES PAYABLE 591,000
OTHER NON-CURRENT LIABILITIES
(PRIMARILY DEFERRED COMPENSATION) 7,829,000 6,569,000
STOCKHOLDERS' EQUITY
PREFERRED STOCK $.01 PAR VALUE; NONE ISSUED
COMMON STOCK $.01 PAR VALUE 161,000 161,000
ADDITIONAL PAID-IN-CAPITAL 31,378,000 31,079,000
RETAINED EARNINGS 117,705,000 115,754,000
149,244,000 146,994,000
FOREIGN CURRENCY TRANSLATION ADJUSTMENTS 156,000 261,000
TREASURY STOCK (160,888 SHARES), AT COST (1,661,000) (1,661,000)
TOTAL STOCKHOLDERS' EQUITY 147,739,000 145,594,000
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 175,633,000 $ 171,524,000
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The Consolidated Balance Sheet as of June 30, 1995 is unaudited but, in the
opinion of management, reflect all adjustments (consisting of normal
recurring adjustments) necessary to present fairly the Company's financial
position.
Exhibit Ib
